Canada's goods trade surplus contracted sharply in July, driven by weaker shipments of energy and metal products and a continued rise in imports, official data showed on Thursday. The Statistics Canada report recorded a surplus of C$769 million for the month, down from a four-year high of C$4.2 billion posted in June.
Economists surveyed ahead of the release had expected a July surplus of C$3.57 billion. Instead, total exports fell 2.3% while imports rose 2.2%, leaving the country with its fifth consecutive monthly trade surplus but at a much reduced level.
The decline in exports was led by energy products, which account for almost a quarter of Canada’s overall exports and historically send about 95% of their volumes to the United States. The value of energy exports dropped 4.4% in July, marking the third month in a row of declines. Exports of crude oil fell 5.5% in July, with both prices and volumes down, Statistics Canada reported.
Metal and non-metallic mineral product exports, which had surged by 15.8% in June, reversed course and fell by 8.5% in July. As a consequence, total goods exports declined to C$76.14 billion from C$77.96 billion in June. Excluding metals and energy, exports nonetheless edged higher by 0.6% in the month.
Not all categories moved lower. Exports of aircraft and other transportation equipment and parts jumped 34.9% in July, partially offsetting the broader downturn in commodities-related shipments.
On the import side, the value of inbound goods climbed to C$75.37 billion from C$73.76 billion in June, marking the sixth straight monthly increase. This rise was led by an 11.4% increase in imports of motor vehicles and parts, with most of that equipment arriving from the United States.
Trade flows with the United States showed a notable shift in July. Exports to the U.S. fell 6.6% while imports from the country rose 1.8%, reducing Canada’s trade surplus with its largest trading partner by more than 40% to C$5.9 billion.
The U.S. remained the destination for the bulk of Canadian exports, accounting for 66.35% of total shipments in July. That share, however, has been sliding - down from 69.39% in June and 72.64% a year earlier - signaling a gradual easing of Canada’s relative reliance on the U.S. market for exports. Canada’s import dependence on the U.S. has also narrowed, falling to 59% over the past 12 months from 62% in 2024.
Exports to countries other than the United States rose 7.4% in July, while imports from non-U.S. sources increased 2.8%, leaving Canada with a non-U.S. trade deficit of C$5.1 billion, an improvement from a C$6.1 billion deficit in June.
Observers note that the July results arrive just weeks before Washington implemented a package of 50% new tariffs last month, a policy shift that Statistics Canada said will present a tougher test for Canadian exporters in coming months. For now, the data capture a mixed picture: resilience in some manufactured goods such as aircraft components alongside softness in energy and mineral shipments that are central to Canada's export mix.